Magnetizing, demagnetizing, and remanent magnetization curves for[Co(12 Å)/Ag(60 Å)]×15multilayered/granular films thermally treated have been measured. The changes of the giant magnetoresistance and the interaction effects have been explained as a result of the structural, morphological, and magnetic evolution of the samples as a function of the thermal treatment. It has been inferred that for samples annealed at temperatures lower than 360 °C, the changes of the giant magnetoresistance come from the misalignment of the magnetic moments of the Co particles formed during annealing. A strong correlation between the giant magnetoresistance and the magnetic interaction effects has been found for samples annealed at temperatures higher than 360 °C: the giant magnetoresistance is degraded as the demagnetizing interparticle interactions are increased. ©1997 American Institute of Physics.